Ukraine war: EU countries agree new sanctions on Russia that includes a price cap on Russian oil
The European Union has approved new sanctions against Russia, including a price cap on Russian crude oil and refined products.
It comes in direct response to the illegal annexation of four Ukrainian regions.
The latest sanctions, approved on Wednesday morning by EU ambassadors, also introduce new exports and imports ban, as well as a brand-new provision that would prevent EU nationals from sitting on governing boards of Russia's state-owned companies.
New individuals and entities accused of undermining Ukraine's territorial sovereignty are being added to the extensive blacklist.
Fossil fuels are Russia's main source of revenue and make up 45% of the country's federal budget.
According to Russia's central bank, in 2021, sales of Russian crude oil amounted to $110.2 billion while refined oil products, like diesel and gasoline, brought in $68.7 billion.
Western countries want to slash these huge revenues, which they fear are being funnelled into the costly invasion of Ukraine.
The price cap on oil was agreed in principle by the G7 in early September and needs to be transposed into EU law in order to make it effective and enforceable.
The G7 intends to forbid their insurance and shipping companies from providing services to Russian tankers that sell oil at a price that exceeds the agreed-upon cap.
Commercial oil tankers need insurance to cover the costs of incidents beyond their control, such as delays, damage to supplies, theft or even war.
EU and UK-based insurers enjoy a dominant position in this services market, making it difficult for Russian vessels to find coverage elsewhere.
The shipping industry of Greece, Cyprus and Malta also plays a key role in transporting Russian oil around the world.
Discussions among EU ambassadors
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